Newsvendor pull-to-center reconsidered

• Published in: Decision Support Systems Vol. 58; pp. 68 - 73
• Main Authors: Lau, Nelson, Hasija, Sameer, Bearden, J. Neil
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier Sequoia S.A 01.02.2014
• Subjects: Aggregates; Decision making; Decision support systems; Demand; Mathematical models; Operations management; Probability distribution; Profit maximization; Statistics; Studies

In the newsvendor problem, a pull-to-center effect has been asserted, whereby subjects are said to order a quantity between the mean of the demand distribution and the expected profit-maximizing quantity. These claims have only been examined using group-level aggregate statistics. Looking at individ...